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2014 (5) TMI 11 - HC - Income TaxPenalty - Addition @ 2% as commission – Accommodation entries – Penalty u/s 158BFA(2) of the Act – Held that:- It is purely a finding of fact by the ITAT and imposition of penalty is based on the order of the ITAT where the addition was sustained after elaborate discussion by the ITAT - Penalty under sub-section (2) of Sec. 158 BFA of the Act is provided where the AO computes income in excess of what is declared by the assessee for the block period – the contention of the assessee that the penalty provisions contained in Sec. 271(1) (c) of the Act so also Sec. 158 BFA(2) are pari-materia, cannot be said to be correct as both are independent sections and in different situations - if the assessee fulfills the criteria, then no penalty is leviable but, there is a categorical finding by all the three authorities that the assessee was involved in undisclosed transactions and had huge credits in the bank account to the tune of more than Rs.2.5 crores and in case the search operation would not have taken place, would have gone unnoticed. Overwhelming evidence on record clearly proves that all these transactions were out of books and the Tribunal, after considering the connected case of Vora Group, where three percent commission was assessed, assessed only two percent – it cannot be said to be merely on the basis of estimated/adhoc basis but after considering the overall facts and circumstances of various searches in the group and after appreciation of evidence on record - the penalty envisaged under sub-section (2) of Section 158 BFA, is entirely on different background as compared to one that can be imposed under Section 271(1)(c) of the Act - the AO has not committed any error in imposing such penalty or the Tribunal in confirming the same – the order of the Tribunal is upheld as no substantial question of law arises for consideration – Decided against Assessee.
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